Designing A Loyalty Scheme For VIP Salon Clients

Three years ago, we launched a Buy Six Get One Free Loyalty Card in the salons, which has proved very successful since. But, although the scheme worked well most of the time, when we calculated how much we gave away (especially on top of corporate discounts) we were sometimes discounting quite heavily for some clients – to the tune of around £20,000 ($31,268) per year across three salons. Our salons sales were increasing each year, but we don’t want to give away too much profit if we don’t need to.

So, we developed a new two-tiered scheme that is simpler for the client, more marketable for us and easy to manage.

10% Off For Everyone

The first thing did we did was get rid of the Buy Six Get One Free system and replace it with a 10% off for all. We already offer group discounts in the salon to large companies and organisations like local Slimming World and Weight Watchers groups, so this is just an extension of that. This is how it works…

New clients must spend £50 in the salon before we give them a loyalty card – they have to earn it. They then get a small key fob card that can be placed on a key ring for safe keeping. They must show the loyalty card each time to get their discount and if they lose it, they must pay 50p (less than a dollar) as a small replacement fee.

By creating a key fob style loyalty card we are almost encouraging the clients to ‘show off’ their card on their keyring – and most do.

We do have some limitations. The 10% off discount can not be used against any other discounts or offers in the salon or against any money-saving courses. We save money by giving away less than we used to with our old loyalty scheme, but the client gets 10% off all standard treatments and services in the salon.

The VIP Card

We also wanted to create a more exclusive club for some clients with some added extras. So, we created the VIP card. We also decided we were going to charge for it – £100 per year (approx. $150).

Clients who sign up for this scheme get much more for the added money:

20% off all full price salon treatments, tanning and beauty packages.

10% off retail purchases in the salon.

10% off treatment courses (these are already discounted so this is an added bonus).

​Also, if they are signed up to our salon late list, they benefit from last minute discounts of 50% instead of the usual 30%.

When the client signs up, with give them a small questionnaire, one of which is “Which treatment have you never had that you’d really like to?”. So, when it’s their birthday, we also send them a printed birthday card, signed by their therapists with a voucher for that treatment.

Results

I was expecting some negativity towards the new loyalty scheme, but most clients much prefer it because it’s simpler. As for the VIP scheme, we expected to maybe sell ten. We ended up selling 24 in the first two months, generating some quick income to more than cover the costs of the whole campaign.

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16 Comments

Craig, I’ve been reading your website -it’s great.
I have been thinking of introducing a loyalty scheme and I’m not sure I understand how yours works. so if the client spends £50 or more, they get a key ring with the salon logo and also 10% off that treatment or next treatment?

The basic loyalty scheme kicks in AFTER someone has spent an initial £50. ie. A new client comes in and after two visits spends over £50. Then, they get the keyring card. Every time they show it after that, we give them 10% off.

Hi Julia, yes, very generous. But, for me it’s all about building loyalty. Our previous system offer one free treatment after six, which actually works out higher.

Any discounts we offered can’t be used with other discounts, ie. Monthly offers, corporate discounts, etc.

I take the view that I am prepared to give anyone a 10% discount and if I can get their loyalty, this is the best way to do it. Although we give away a lot, our overall sales are increasing, as is our client retention.

Craig, I’m still working my mind about this loyalty scheme.
Is the 10% off applicable on any treatments afterwards i.e. If they come in and have 2 caci treatments, they would qualify for the 10% discount, is that right? Does the 10% apply to courses and products?

The 10% applies to all treatments EXCEPT money saving courses. IE. You become eligible for a loyalty card as soon as you have paid at least £50 on full price treatments and then you get 10% off all full-paying beauty treatments, packages and tanning sessions.

Hi Craig , I have recently opened up a small non surgical aesthetic and beauty business and I find your blog really helpful especially the locality cards. I am definitely going to start this with my clients . Please keep your blog going I find it really informative , especially for professionals like myself new to the industry .
Regards
Rose

Hi Craig, this is a great blog with so much useful information!
I was wondering how you manage the scheme?
It’s is tied into a system (maybe the timely one mentioned on the site) or is it done manually?

Key cards is something I have been looking at bringing into the salon when I came across your site with a great scheme!
Thanks
Toni

Hi Toni, This scheme runs alongside our salon computer system. There are specific discounts in Phorest and each client record is marked as VIP with expiry date. Because we offer different discounts on products, course and treatments, we can’t set a blanket discount though.

I’ve recently brought the beauty side to a friend’s hair salon and we’ve been looking at marketing and building the business. We’ve talked about attending local slimming groups and loyalty schemes so nice to know we are on the right track. We are only a small business though and don’t have computerised systems but if the client has a discount card and we know we give a percent discount then we should be able to do it?
It’s a really good idea, glad I came across this site, interesting and informative, keep it up!